Quality Management

• What does the term quality mean?

• Quality is the ability of a product or
service to consistently meet or exceed
customer expectations.

9-1
 Quality Assurance vs. Strategic
Approach
• Quality Assurance
– Emphasis on finding and correcting defects
before reaching market
• Strategic Approach
– Proactive, focusing on preventing mistakes
from occurring
– Greater emphasis on customer satisfaction

9-2
 Dimensions of Quality
• Performance - main characteristics of the
product/service
• Aesthetics - appearance, feel, smell, taste
• Special Features - extra characteristics
• Conformance - how well product/service
conforms to customer’s expectations
• Reliability - consistency of performance

9-3
 Dimensions of Quality (Cont’d)

• Durability - useful life of the

product/service
• Perceived Quality - indirect evaluation of
quality (e.g. reputation)
• Serviceability - service after sale

9-4
 Costs of Quality
• Failure Costs - costs incurred by defective
parts/products or faulty services.
• Internal Failure Costs
– Costs incurred to fix problems that are detected
before the product/service is delivered to the
customer.
• External Failure Costs
– All costs incurred to fix problems that are
detected after the product/service is delivered to
the customer.
9-5
 Costs of Quality (continued)

• Appraisal Costs
– Costs of activities designed to ensure
quality or uncover defects
• Prevention Costs
– All TQ training, TQ planning, customer
assessment, process control, and quality
improvement costs to prevent defects from
occurring

9-6
Statistical Process Control with p Charts
When should we use p charts?

1. When decisions are simple “yes” or “no” by inspection

2. When the sample sizes are large enough (>50)

Sample (day) Items Defective Percentage

1 200 10 0.050
2 200 8 0.040
3 200 9 0.045
4 200 13 0.065
5 200 15 0.075
6 200 25 0.125
7 200 16 0.080
Statistical Process Control with p Charts
Let’s assume that we take t samples of size n …

total number of "defects"

p
(number of samples) (sample size)

p (1  p )
sp 
n

UCL  p  zs p
LCL  p  zs p
Statistical Process Control with p Charts

80 1
p   0.066
6  200 15

0.066(1  0.066)
sp   0.017
200

UCL  0.066  3 0.017  0.117

LCL  0.066  3  0.017  0.015
Statistical Process Control with p Charts

UCL =
0.117

p = 0.066

LCL = 0.015